Break-Even in Units, Target Income, New Unit Variable Cost, Degree of Operating Leverage, Percent Change in Operating Income Reagan, Inc., has developed a chew-proof dog bed-the Tuff-Pup, Fixed costs are $224,000 per year. The average price for the Tuft-Pup is s37, and the average variable cost is $23 per unit. Currently, Reagan produces and sells 20,000 Tuff-Pups annually. Required 1. How many Tuff-Pups must be sold to break even? 16,000 units 2. If Reagan wants to earn $77,000 in profit, how many Tuff-Pups must be sold 21,500 units Feedback Check My Work Prepare a variable-costing income statement to verify your answer Reagan, Inc. Income Statement Sales 795,500 Less: Variable cost 301,000) 24,000 77,000 Contribution margin . Less: Fixed